Wealthy foreigners will be offered visas in exchange for donations to
universities and hospitals, the official migration advisory is expected to
recommend

Foreign millionaires will be offered visas in exchange for donations to hospitals and endowments to universities, under proposals by the government's official migration advisers.

The Migration Advisory Committee is expected to recommend on Tuesday that wealthy foreigners and their families should be allowed to live in Britain indefinitely in exchange for endowments to good causes.

A second option expected to be outlined in the auctioning of visas to the highest bidders in an attempt to raise more money.

However, this measure has been criticised by immigration lawyers and has reportedly been greeted with scepticism by the Home Office and Department for Business, Innovation and Skills.

The proposals come amid concerns that existing investor visas have become a "cheap" way for many wealthy Russians and Chinese to remain indefinitely.

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Under the current rules, wealthy foreigners can pay £1million, £5million or £10million in return for being allowed to apply for permanent residence in the UK after five, three and two years.

The investments are made in gilts - government bonds - which can later be sold when the individual applies for citizenship, making the process effectively like a loan.

Sir David Metcalf, who chairs the committee, told MPs last month that there should be a "proper discussion" about investor visas.

He said: "It may very well be that we should be auctioning some of these slots. There should be proper discus­ sion about it. Equally it may very well be that we should be letting people in if they endow a Cambridge college, a major teaching hospital or the London School of Economics with £10 million."

He argued that most investors are buying gilts that Britain does not need, as even a £10million purchase is insignificant in comparison to the £300million sold by the Treasury every day to fund the deficit.

Keith Vaz, the chairman of the Home Affairs select committee, was supportive of the review. He said: "The whole area around the investor route towards citi­zenship needs to be examined ... At the moment the route ensures benefits to individuals but not society as a whole."

Sir Andrew Green, chairman of MigrationWatch UK, said: "It would be absurd if this route was allowed to become a means of selling British passports."

According to Pinsent Masons, a law firm, the number of investor visas rose from 423 in 2011-12 to 530 last year, with a further 1,038 visas issued to the applicant's children. The number of visas issued to wealthy Chinese rose from 95 to 171, Americans from 19 to 66 and Russians from 99 to 125.

Jill Turner, a senior associate at Pinsent Masons, said: "High net worth individuals continue to pick the UK over other major international cities as they seek a safe haven for wealth that they have usually worked very hard to build up.

"The UK benefits from a very stable, liquid economy and is free from any governmental interference in the assets of private individuals or any political instability."

She added: "By contrast, China and Russia, where so many of these investors now come from, have a fairly volatile stock and housing market that can make it a risky place to invest, and many of the Chinese investors who flock to the UK feel that their wealth is better protected in a democratic and transparent country."